HKSM
Actual Cost (AC)
The amount of money actually spent or accrued for the work that has been completed on an activity within a defined reporting period.
Key Points
- AC is the real expenditure tied to work accomplished, taken from accounting or cost records.
- It can be reported for the current period or cumulatively, at the activity, WBS, or project level.
- Used in earned value analysis (e.g., CV = EV − AC, CPI = EV ÷ AC) to assess cost performance.
- Includes direct and indirect costs that have been incurred; it excludes future commitments not yet realized.
Example
A team planned to spend $20,000 this month on a testing activity. Payroll and invoices processed for that work total $18,500 this month. The AC for the month is $18,500, even though a $3,000 purchase order was issued but not yet billed.
PMP Example Question
Which statement best describes Actual Cost (AC)?
- The budgeted cost for work scheduled during the period.
- The actual expenditure for the work completed during the period.
- The forecasted cost to finish the remaining work.
- The budgeted value earned based on completed work.
Correct Answer: B — Actual expenditure for completed work in the specified period
Explanation: AC reflects the real costs incurred for work performed in a given time frame, not the planned or earned values, and not future forecasts.
